• Consumer Guide: Offers of Compensation

• Consumer Guide: Realtor's Duty to put client's interest first-PDF

• NAR facts.realtor

• NAR Rules of Communicating Compensation

• NAR Settlement FAQ

• NAR Email on the Settlement - July 31

• NAR - Seller's Facts Sheet

• NAR - Buyer's Facts Sheet

• NAR - Broker to Broker Agreements 101

• NAR - What the NAR Settlement means to Buyers & Sellers

• NAR - Written Buyer Agreements 101

• NAR - Homebuyers: Here's what the Settlement Means for You

• NAR - Home Sellers: Here's what the Settlement Means for You
  
  179 Ways Realtors are Worth Every Penny

• 105 More Ways are Worth Every Penny

• So You’re Ready to Buy a home, Here’s your next 111 ToDo’s - NAR

• Communication Toolkit

• TAR Settlement Talking Points

• TAR Form Descriptions

• TAR Webinar 6/18

• TAR Legal FAQ’s

• TAR - Show Your Value (PDF Flyers)

• TREC FAQ’s
  
  HAR Settlement FAQ

If the seller and the buyer will pay their own brokers:

• No additional compensation agreements are required other than the listing agreement and buyer representation agreement.

• The representation agreements authorize the title company to pay broker fees.

If the listing broker agrees to pay the buyer’s broker:

• Compensation Agreement Between Brokers (TX 2402). Executed by the listing broker and buyer’s broker before the offer is presented.

• Addendum Regarding Brokers’ Fees (TX 2406). Executed by the seller and the buyer and can be included as part of an offer package delivered to a seller. It may also be executed later in the transaction.

• Check box D(1) and insert the agreed upon amount.

  • Note: Paragraph D(1) serves the same function as the compensation disclosure located at the bottom of Page 10 of the One to Four Family Residential Contract. It notifies the title company of the broker-to-broker compensation agreement. If the only fee the buyer’s broker receives is from the listing broker, you can insert the amount on Page 10 of the sales contract and would not need to use Addendum Regarding Brokers’ Fees (TXR 2406).

If the seller agrees to pay the buyer’s broker using a separate compensation agreement:

• Compensation Agreement Between Broker and Owner (TXR 2401). Executed by the seller and buyer’s broker.

• Addendum Regarding Brokers’ Fees (TXR 2406). Executed by the seller and the buyer and can be included as part of an offer package delivered to a seller. It may also be executed later in the transaction. Check box D(2) and box D(2)(a) and insert the agreed upon amount.

If the seller agrees to pay the buyer’s broker as part of the sales contract:

• Addendum Regarding Brokers’ Fees (TXR 2406). Executed by the seller and the buyer and can be included as part of an offer package delivered to a seller. It may also be executed later in the transaction. Check box D(2) and box D(2)(b) and insert the agreed upon amount.

Note: Multiple boxes may be checked under Paragraph D if the buyer’s broker will be compensated from more than one source. For example, if the listing broker and seller both agree to pay a portion of buyer’s broker’s fee, check box D(1) and box D(2)(a) or (b) inserting the appropriate amounts under each paragraph.

No. The Addendum Regarding Brokers’ Fees (TXR 2406) does not have to be used in every transaction. However, it should be used under two scenarios.

First, it's used when the seller agrees to pay an intermediary broker additional compensation. In this case, Paragraph E should be used for the seller to pay the intermediary broker additional compensation to be applied to the buyer-side broker’s fees.

Second, it's used when the seller agrees to pay the buyer’s broker under the sales contract. In this case, Paragraph D(2)(b) must be checked to specify the amount and authorize the payment. For the other options listed in the Addendum Regarding Brokers’ Fees, the form can still be used to provide information to the title company on how the parties are handling brokers’ fees. So, it would be good to use but is not required.

Description1. If the listing agent has a listing agreement with the seller that says the listing broker is sharing compensation (BAC) with a cooperating broker, you would mark paragraph D.1 AND a TXR-2402is required.

2. If the listing agent has a listing agreement but the seller has NOT agreed to the listing broker sharing compensation (BAC) with a cooperating broker, you would mark D.2.b and a TXR-2402 is NOT required.

3. If the seller is paying the BAC directly, mark D.2.a and use TXR-2401.

The Addendum Regarding Brokers’ Fees (TXR 2406) is designed to be used when the seller agrees to pay buyer’s broker fees under a sales contract. It will typically be included as part of an offer package delivered to a seller. But it may also be executed later in the transaction.

How to use 2406

FAQ/TAR

FAQ/TAR TAR

Flowchart

Video Explanation of 2406